Australia's Labour & Equality Outcomes

Author: Ari Yeganeh https://www.linkedin.com/in/ariyeg/

This an exploratory analysis on:

  1. Australia's unemployment and labour participation rates; and
  2. The skills shortages facing Australia and other OECD nations
  3. Implications of this analysis and next steps

What are the global employment trends and how is Australia, the lucky country, faring compared to it's OECD counterparts?

Let's dive in.

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1. Employment Outcomes

Firstly we need to download our datasets. I'm using OECD's employment database found here: https://www.oecd.org/employment/onlineoecdemploymentdatabase.htm

We note here, there are a number of missing values in our dataset, however as these pertain to reference codes and flags, we will ignore for the time being.

To add further insights to our analysis let's import the gapminder dataset

Now let's look at high level unemployment rates for different countries in the OECD...

Comparing broadly to the rest of OECD nations, Australia's unemployment pales in comparison to Latin American nations, South Africa and some European nations.

Note: the above chart is NOT additive. i.e. continent level or world level data cannot be used as it's simply the sum unemployment in the respective groups.

Over time we can see some inconsistencies in our data with nations like India and China appearing in some years but not others. Also we note, the relative large differences in unemployment across nations over time.

Let's now look at Australia and comparable countries more specifically:

Australia had a relatively low unemployment rate relative to other developed countries. However since 2015, it has fallen behind it's counterparts lagging a full percentage point behind by 2019.

In Australia, we can observe a large difference in unemployment by age groups; with younger demographics experiencing an unemployment rate of upto twice as the rest of adult population.

The difference is particularly apparent straight after the 2008 global financial crisis with 15-24 year olds experiencing an almost 50% increase in unemployment rate in just one year.

The labour force participation rates measures the economy's active workforce. It is calculated as the labour force divided by the total working-age population.

In Australia, we can see a large differences by gender and age. Specifically, we can see much higher rates of participation for men and the age groups 25-45.

We can also observe siginifcant changes for female in the age group 55-64 from 35% participation in 2000, to over 61% in 2019. This pattern is consistent across older age groups for both genders signalling a return to the workforce from this older age groups.

Interestingly, men over 65 had double the participation of women in the same age group. Whilst the difference in younger age groups can be partly explained by the impact of child bearing for women, at age 65, there seems to be other factors at play.

Now let's look at participation rates across select countries...

The above chart chart shows the large gap between men and women participation rates. It's clear there a significant difference in participation rate by both gender and country.

Let's look at this difference more closely...

The difference between Men and Women participation rates in the workforce seems to be reducing amongst all developed countries with OECD countries reducing the gap from 22% to 16% from 2000-2019.

New Zealand had the lowest difference in participation rates amongst developed nations with a rate almost half of the OECD average. Australia and UK are not far behind, however the US seems to be going backwards in this trend, indicating a larger differences in employment outcomes between the genders.

2. Skills Shortages

Let's now explore skill shortages across Australia and other OECD nations.

First, let's download and clean up the data from: https://stats.oecd.org/Index.aspx?QueryId=64196#

Let's have a look at overall skills shortages across select countries

We can see large differences in skills gaps across these select countries. We might want to explore further the meanings behind each classification by refering the documentation here from the OECD: https://www.oecd.org/els/emp/OECD%20Skills%20for%20Jobs%20Definitions.pdf

For now, let's look more specifically into the types of skills that make up each broad group.

The above chart gives us a better understanding of what types of skills are under each broad skill group. Hover over tiles to see more information about the skill group and extent of shortage/surplus. From this, we can start to see clear skills gaps in Workstyles and Knowledge in Australia. Specifically, there are large shortages in:

Further, we note skills on the other side of the spectrum with lower shortages and even surplus:

Let's now look at the industries most affected by these skills shortages.

In Australia, we can see industries with largest skills gaps on the right of the chart with Education and Human Health & Social Work topping the list. On the other side of the chart, we have industries in skill surplus: Wholesale and Retail Trade and Accomodation & Food Services.

Let's see how these numbers compare against select countries...

It seems Australia is not alone in it's shortage of Education sector skills with this sector being OECD's top industry for skills shortages by a large margin.

Interestingly, industries with a surplus e.g. "Human Health & Social Work" in other countries like Germany are the same industries Australia has a large shortage in. This type of data might be useful to inform skilled migration strategies between nations.

Now let's look at Australia's skills outlook in more detail by the type of skills within each industry...

In the table above, we can see the composition of skills shortages and surpluses within each industry in Australia.

Most notably, in the Education sector there are significant skills shortages in:

With similar skills shortages in Human Health & Social Work.

Conversely, there were moderate skills surpluses across Accomodation and Construction in:

Learnings and Further Analysis

Australia has been the lucky country for as long as I've been alive. However, it's easy to get complacent and lose touch with technological and global trends that are significantly impacting employment and equality outcomes.

Learning #1 :

Australia's unemployment is enviable on a global scale, however there are large systemic gaps between younger and older generations and men and women, especially when compared to our siblings in New Zealand.

Learning #2 :

Australia faces a large skills gap in 21st century technology and soft skills with surpluses in operations and manufacturing (20th Century Skills). It's clear Australia cannot rely on manufacturing and mining going forward

Learning #3:

The industries most in need of upsklling in Australia are Education and Human Health & Social Work. With the largest skills surpluses being in Wholesale and Retail trade, Accomodation and Manufacturing.

Further analysis

This has been a very high level look into trends in employment and skill shortages. With more time, we may want to:

And after all....maybe it's not too late to save the lucky country after!

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